McHenry Dist. 15 coffers grow with aid of 4-year loan

Think of it as a payday loan -- but at a ridiculously good 4 percent interest rate.

That's how the McHenry Elementary School District 15 board explained the more than $11 million it borrowed Tuesday night at its regular meeting.

Board member Tim Sabatka said the debt certificate of $11,395,000 would be balanced by money the district will put into savings accounts over several years. Taking out the four-year loan would allow the district to make building or classroom upgrades in the interim.

"The money is coming to the district," Sabatka said. "If we do have to do a major project sooner, we have the flexibility to access that money sooner."

The board voted unanimously to issue the debt certificates. The district already decided to defer $2.5 million a year in bond payments and will put that money into savings accounts that accrue 5 percent interest. But District CFO Allan Smigiel said by the time the district raised $11 million that way, it would be 2011.

"We wanted to put the district in a position where it could speed up on construction," Smigiel said. "There's a definite need for expansion."

Smigiel said the district could use the money to revamp old buildings or replace aging mobile classrooms, among many other possibilities.

"We have buildings that are 50 years old," he said. "The district can only spend the money on upgrades and improvements. If it wanted to erect a new building, it would be required to go to taxpayers with a referendum request.

Superintendent R. Alan Hoffman said being able to spend the money when needed, then pay the loan off in four years, would allow flexibility to deal with growing student enrollment.

"We're looking at a minimum of 500 kids coming our way," Hoffman said. "You know you're going to need a significant number of classrooms."